Budget 2017 impact on your personal income-tax: Who pays more, who pays less and by how much

ECONOMICTIMES.COM|

Updated: Feb 02, 2017, 01.20 PM IST

Individuals with taxable income over Rs 50 lakh upto Rs 1 crore will be paying a flat surcharge of 10% on the total tax payable by them.

Here’s who will pay less and who will pay more personal tax following the Finance Minister’s personal tax proposals in Budget 2017. Once the FM’s proposals are implemented:

1. A person with taxable income (after deductions such as Section 80C, etc.) of Rs 3.5 lakh will pay a tax of Rs 2,575 as against Rs 5,150 payable earlier.

2. Persons with taxable income over Rs 5 lakh up to Rs 50 lakh will pay Rs 12,875 less (including the cess saved), according to EY.

3. However, individuals with taxable income over Rs 50 lakh up to Rs 1 crore will be paying a flat surcharge of 10% on the total tax payable by them. For example, an individual earning gross total income of Rs 60 lakh will pay (after availing tax deductions as assumed in the table) Rs 1,45,024 additional tax due to the surcharge. As shown in the table, a person with gross total income of Rs 60 lakh who was paying tax of Rs 15,91,865 would now be paying Rs 17,36,889 (after availing deductions and application of surcharge and cess).

4. Those with income over Rs 1 crore would continue to pay the surcharge of 15% but would get the meagre benefit of saving Rs 12,875 (including saving of cess but excluding the saving on surcharge). For example, a person with gross total income of Rs 1.2 crore will pay (after availing deductions) Rs 39,65,706 as taxes, including surcharge and cess as against Rs 39,80,512 payable earlier. Click here to calculate the post-budget tax on your income

How Arun Jaitley's Budget will make you rich

If you are a salaried employee

* Government will slash the basic rate of income tax from 10 percent to five percent.
* The basic rate applies to those with annual incomes of between Rs 250,000 rupees and Rs 500,000 rupees.

If you are into farming

1 Feb, 2017

* Farm sector will grow at 4.1% this fiscal and government will double income of farmers in five years.
* For imparting new skills to people in rural areas, mason training will be provided to five lakh persons by 2022.
* Farm credit target for next fiscal at Rs 10 lakh crore.
* Fasal Bima yojana increased to 40% of crop area; raised to Rs 1.41 lakh crore in Kharif 2017 season.
* Infrastructure investment pegged at Rs 3.96 lakh crore.
* Dairy processing fund with Rs 2000cr corpus to be set up.
* To double irrigation fund corpus to Rs 40,000 cr.

If you are a business person

1 Feb, 2017

* Scope of domestic transfer pricing restricted to only if one of the entities involved in related party transaction enjoys specified profit-linked deduction.
* Threshold limit for audit of business entities who opt for presumptive income scheme increased from Rs 1 crore to Rs 2 crore. Similarly, the threshold for maintenance of books for individuals and HUF increased from turnover of Rs 10 lakhs to Rs 25 lakhs or income from Rs 1.2 lakh to Rs 2.5 lakh.
Read more here

If you live in rural India

1 Feb, 2017

* The government aims to bring 1 crore households out of poverty by 2019.
* Will take steps to ensure participation of women in MGNREGA up to 55%.
* For imparting new skills to people in rural areas, mason training will be provided to five lakh persons by 2022.
* The government proposes to complete 1 crore houses for those without homes.
* Will allocate Rs 19,000 crore for Pradhan Mantri Gram Sadak Yojana in 2017-18.
* The country is set to achieve 100% rural electrification by March 2018.
* With a progress of Swachh Bharat mission, sanitation coverage has gone up from 42% in Oct 13 to 60% now.
Read more here

If you are into real estate

1 Feb, 2017

Finance Minister Arun Jaitley has granted infrastructure status to affordable housing, a long-time demand from the industry. Owing to surplus liquidity, banks have started reducing lending rates for housing.
Read more here